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    Obama Seeks to Send Another Boat-Load of Money to the States – Especially Blue

    06/16/2012
    Democracy and Power 103:  Government money

    In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other. – Voltaire (1764)

    The money taxed and spent by the politicians comes from the labor and ingenuity of millions of working persons.  Politicians spend other peoples’ money.  Politicians then transfer money from productive people to special-interest groups.

    Obama Seeks to Send Another Boat-Load of Money to the States – Especially Blue

     
    President Obama intentionally said that the private sector of the economy was doing fine, and the federal government needs to send money to the states to hire more employees.  The Wall Street Journal quotes the President:

    The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government—oftentimes, cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in. 

    The President’s statement was premeditated – not a gaffe.  This was a deliberate tactic, pandering to state and local government employees – a major sector of the Democratic base.  Is this too harsh a conclusion?  No.
     
    A year ago  our President made the same plea – send money to the states.  The President’s 2011 jobs bill sought $200 billion,  another bailout for the states specifically focused to sending money to blue states.  Paul E. Peterson and Daniel Nadler of Harvard’s Program on Education Policy and Governance explain in a Wall Street Journal article - A Blue-State Bailout in Disguise

    Last Thursday, the president urged Congress to pony up roughly $200 billion in taxpayer money to "provide more jobs for teachers [and] more jobs for construction workers" and more money to carry out other state and local activities. He urges Congress to spend this money even after handing out hundreds of billions of dollars for similar purposes as part of the 2009 stimulus package, as well as a score and more billion dollars again in 2010.

    Besides continuing to bailout the states, these Harvard scholars found the 2011 Jobs Bill especially beneficially to blue states.

    These vast contributions to the coffers of state and local governments, though pitched as a jobs bill, are in reality the latest in a series of bailouts for debt-ridden state and local governments. They are of special benefit to states in the blue regions of the country where the president's most fervent supporters reside.

    Blue states have the biggest debts and are in great need of the bailouts, much like Obama’s home state of Illinois.  Again the Harvard scholars state:

    In a new study at Harvard's Program on Education Policy and Governance, we discovered why the Obama administration is so interested in helping out the states. States with a bluish hue—that is, states with legislatures that are heavily Democratic and have a highly unionized public-sector work force—must pay interest rates that are often an extra half a percentage point higher than states with a reddish coloring.

    Specifically, a 20 percentage-point increment in either the Democratic share of the state legislature or a comparable increase in the share of the public work force that is unionized drives up interest rates by nearly a half a percentage point on a five-year security note. That amount is nontrivial. In Obama's home state of Illinois, it is costing governments over $700 million annually.

    Thus, today, in 2012, the President makes a similar deceptive plea:

    "And so, if Republicans want to be helpful, if they really want to move forward and put people back to work, what they should be thinking about is, how do we help state and local governments and how do we help the construction industry."

    Be thankful, Republicans control the House.  Otherwise Obama, Pelosi and Reid would send a boat-load of money to the states, which exactly what they did prior to the 2010 election when Pelosi called Congress back from the summer recess to pass a $26 billion bailout for state employees – specifically teachers.